SCHEDULE: WBD, Dplay Boost Anghami Stake to 71.3% via Note Conversion

Warner Bros. Discovery and Dplay Entertainment increased their beneficial ownership in Anghami Inc. to 71.3% following the conversion of $55 million in notes and accrued interest into ordinary shares.

Summary

• Warner Bros. Discovery, Inc. (WBD) and Dplay Entertainment Limited (Purchaser) have filed an Amendment No. 1 to their Schedule 13D regarding their beneficial ownership in Anghami Inc.
• The Reporting Persons now beneficially own an aggregate of 7,417,345 Ordinary Shares of Anghami Inc., representing 71.3% of the class.
• This ownership includes 6,074,721 Ordinary Shares held of record by OSN Streaming Limited and 1,342,624 Ordinary Shares underlying exercisable OSN Warrants.
• On December 15, 2025, Anghami Inc. issued 2,376,171 Ordinary Shares to OSN Streaming.
• This issuance was a result of OSN Streaming converting $55,000,000 in principal amounts outstanding under Notes and approximately $4,404,312.86 in capitalized and accrued PIK Interest.
• The conversion was effected at a base conversion price of $25.00 per Ordinary Share, adjusted for the 1-for-10 reverse stock split implemented on August 1, 2025.
• The percentage ownership calculation is based on a total of 10,407,432 Ordinary Shares, which accounts for outstanding shares, newly issued shares from conversion, and shares from OSN Warrants.

Sentiment

Score: 6

Explanation: The conversion of debt to equity is generally positive for the company's balance sheet, reducing liabilities. The increased ownership by a major media conglomerate like Warner Bros. Discovery signals strong strategic interest. However, the prior reverse stock split and the significant discount between the conversion price and warrant exercise price introduce some complexity and potential concerns about underlying valuation or past performance.

Positives

• Increased beneficial ownership for Warner Bros. Discovery and Dplay Entertainment Limited in Anghami Inc. to 71.3%, indicating strong commitment and control.
• Conversion of debt (Notes and PIK Interest) into equity strengthens Anghami's balance sheet by reducing liabilities.

Negatives

• The conversion of notes into equity, especially after a reverse stock split, could imply dilution for existing shareholders not participating in the conversion.
• The 1-for-10 reverse stock split implemented on August 1, 2025, often signals underlying financial distress or a low stock price, which can be a negative indicator.

Risks

• The existence of a 1-for-10 reverse stock split on August 1, 2025, suggests potential underlying financial challenges or a previously low stock price, which are inherent risks.
• The conversion price of $25.00 per share (post-split) compared to the OSN Warrants exercise price of $115 per share suggests potential valuation discrepancies or different tranches of investment, which could impact future equity value.

Future Outlook

The filing mentions future 'Second Completion' and 'Third Completion' events related to the ownership structure of OSN Streaming. Upon consummation of these events, Dplay Entertainment Limited's stake in OSN Streaming will increase from 11.28% to up to 33.83%, while OSN Streaming Holding Limited's stake will decrease from 88.72% to 66.17%. This indicates a planned restructuring of ownership within the OSN Streaming entity, which indirectly affects the beneficial ownership of Anghami Inc.

Industry Context

This filing reflects a significant consolidation of ownership in Anghami Inc., a Middle Eastern music streaming service. The increased stake by Warner Bros. Discovery and Dplay Entertainment Limited (part of WBD) suggests a strategic move to deepen their involvement in the digital entertainment and streaming market, particularly in the MENA region. This could be seen as a move to strengthen their position against global and regional competitors in the streaming space.

Comparison to Industry Standards

• The conversion of debt to equity is a common financial restructuring tool, especially for growth-stage companies or those facing liquidity challenges, to reduce debt burden and strengthen the balance sheet.
• A 71.3% beneficial ownership stake by a strategic investor group (WBD/Dplay) is a substantial controlling interest, which is higher than typical minority investments seen in the industry and indicates a strong strategic alignment or potential for future full acquisition.
• The 1-for-10 reverse stock split suggests the company's stock price was likely low, a common tactic to meet exchange listing requirements or improve market perception, similar to actions taken by other small-cap or distressed companies.

Related Party Transactions

• The conversion of Notes and PIK Interest into shares by OSN Streaming, which is partially owned by the Reporting Persons (WBD and Dplay Entertainment Limited), constitutes a related party transaction.
• Future adjustments in ownership percentages within OSN Streaming Holding Limited and the Purchaser (Dplay Entertainment Limited) also fall under related party dealings.

Stakeholder Impact

• Shareholders: Existing public shareholders may experience dilution due to the issuance of new shares upon conversion, although the reduction in debt could be seen as a positive for the company's financial health. The increased control by WBD/Dplay could lead to more stable strategic direction but also less influence for minority shareholders.
• Creditors: The conversion of debt to equity reduces the company's outstanding liabilities, which is positive for remaining creditors.
• Employees/Customers: No direct impact mentioned, but a stronger balance sheet and clearer strategic direction from a major investor could indirectly benefit the company's operations and stability.

Next Steps

• Consummation of 'Second Completion' and 'Third Completion' as defined in Item 6 of the Original 13D, which will adjust the ownership percentages within OSN Streaming Holding Limited and the Purchaser.

Key Dates

Recommendation

While the increased strategic investment from Warner Bros. Discovery and the debt-to-equity conversion are positive for Anghami's balance sheet and long-term strategic alignment, the context of a recent reverse stock split and the significant controlling stake by the reporting persons suggest a complex situation. The market may view the debt conversion positively as it reduces liabilities, but the underlying reasons for the reverse split and the valuation implied by the conversion price versus warrant exercise price warrant caution. A 'hold' recommendation allows investors to observe how the market reacts to the increased control and the company's performance post-conversion, especially given the high percentage of ownership now concentrated.

Keywords

Anghami Inc, Warner Bros. Discovery, Dplay Entertainment, Schedule 13D/A, beneficial ownership, debt conversion, equity conversion, ordinary shares, OSN Streaming, reverse stock split, PIK interest, warrants